My professional career has focused on how companies and their people can operate in both a principled and profitable way. I am the author of HOW: Why HOW We Do Anything Means Everything published by Wiley & Sons in an Expanded Edition in September 2011 with a Foreword by President Bill Clinton and a new preface. I am the founder and CEO of LRN. Since 1994, LRN has helped hundreds of companies simultaneously navigate complex legal and regulatory environments and foster ethical cultures. I am a Harvard Law School graduate who also earned a bachelor’s and master’s degree in moral philosophy from UCLA and a BA with honors in philosophy, politics, and economics from Oxford University. To learn more about my company, visit www.lrn.com. To learn more about the HOW philosophy, visit www.howsmatter.com.

The Top 10 Ways to Become Truly Social

5) Invest in culture rather than governance. A system of governance via rules and policies only tells employees what they can and cannot do; think of a restrictive social media policy that dictates what employees can and cannot type or tweet. A more human operating system puts humanity, rather than rules, at its core and trusts employees to act, inspired by values, mission and purpose, as opposed to being coerced. Consider how Southwest Airlines flight attendants are free to flex their creativity and sense of humor when walking passengers through safety procedures; their individual personalities bring an uplifting jolt to a mundane process. Southwest’s culture and values – rather than any policies or procedures — gives rise to this type of employee connection-forging. Not surprisingly, Southwest’s culture has also helped make it a leading social enterprise.

6) Give trust away. Sticking with Southwest Airlines, why do their flight attendants entertain their passengers? Because the company trusts them to devise their own ways to connect with customers in meaningful and innovative ways. Leaders of truly social enterprises understand the importance, and value, of inspiring their employees to go on a TRIP. (TRIP is an acronym for how Trust enables Risk, which propels Innovation and, ultimately, leads to Progress.) Becoming a truly social enterprise requires leaders to trust each employee to interact on behalf of the company in the social realm. This applies to one-man donut vendors as well as the world’s largest companies. By trusting his customers to create their own change from a pile of coins near the cash register, Ralph, a New York City donut maker, engendered greater customer loyalty and boosted his productivity (manning his cash register limited his precious donut-making time).

7) Scale your values. Despite the catastrophic failure of the “too big to fail” mindset, many companies continue to focus solely on how they are scaling their businesses; instead they should be focusing more fundamentally on how they are going to scale their values. By focusing on scaling their values, companies can generate more valuable and profitable connections with employees, suppliers and customers. Size is no match for social media; companies can no longer exert their will – or even price hikes or new fees – on customers without enduring hits to their reputation delivered via social channels. The right values, principles and behaviors offer resilience in a socially networked world. By scaling the right values, truly social enterprises have the resiliency necessary to withstand criticism and the innovation necessary to thrive in the long-term.

8) Measure HOW not ‘how much’. Companies have been extraordinarily successful at measuring “how much”, as in “how much” revenue, profit, market share and debt and how many page views their website generates and how many followers they attract via social media. Organizations reward employees who produce the most tweets or attract the most followers with badges and other rewards. While this approach increases the volume of an enterprise’s social interactions it neglects what matters most: the quality of their social interactions- how their employees do what they do and relate to others. Just as companies and countries are realizing that “how much” measures like GDP, quarterly revenue growth and market share are insufficient indicators of long-term success and sustainability, so too should social mavens relinquish the “how much” mindset in favor of measuring HOW genuine, creative, loyal, innovative and valuable are their social interactions.

9) Treat business as inseparable from life. If our enterprises are to become truly social we should stop treating them, the rules they impose on employees, the impacts they deliver to our communities and the behavior they foster, as separate from the rest of life. Business and life are no longer different spheres that are governed by different rules. Think about that scene in “The Godfather” where Michael Corleone tells Sonny, “It’s not personal. It’s strictly business.” That code of the Corleone family no longer applies in a world where everything is personal because everyone’s behavior affects everyone else. In a world where we are now all connected, social enterprises ask employees to represent the values of the company 24/7 in all of their social interactions. Truly social enterprises give employees the right culture, values, support and trust to guide their interactions.

10) Compete on behavior. In a highly connected, social world, technological innovation advantages last for weeks rather than decades or years. Product innovation, process mastery and other traditional forms of competitive differentiation can easily and quickly be identified, replicated and brought to market today. The only form of differentiation left is behavior: not what we do (e.g. hold social conversations with customers), but how we do it (hold meaningful conversations with our customers.) Truly social enterprises reward employees for the right behaviors. Not surprisingly, customers, pundits and other stakeholders punish companies for exhibiting the wrong behaviors, as Best Buy’s recent reputational challenges demonstrated.

Embracing these approaches, of course, requires more than the flip of a switch. It requires leaders to commit to a journey to create organizations rooted in values and the pursuit of significance. Their undertakings are less like the linear trajectory many businesses try to follow quarter-to-quarter and more like the curvilinear journeys we pursue in life. That’s something we should not forget as we create the freedom and frameworks necessary for our enterprises to evolve to a more social, and sustainable, existence.

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